Composite Leading Indicator
The composite leading indicator (CLI) is designed to provide early signals of turning points in business cycles showing fluctuation of the economic activity around its long term potential level. CLIs show short-term economic movements in qualitative rather than quantitative terms.
The series returned is the OECD-harmonised, amplitude-adjusted index at monthly frequency, oscillating around a long-run average of 100: readings above 100 point to above-trend activity ahead and readings below 100 to below-trend activity. Coverage is narrower than the confidence indices – around 22 countries and aggregates.
The CLI is read for its direction and turning points rather than its level: a reading below 100 that is still rising signals a recovery ahead, one above 100 that is falling a slowdown. The latest months are estimated from incomplete data and are revised, sometimes enough to change the signal, so a turning point is usually only confirmed after several months. It is used alongside business confidence and PMIs to anticipate changes in GDP growth by about six to nine months.
See definition: https://data.oecd.org/leadind/composite-leading-indicator-cli.htm
Also known as: CLI, leading economic indicator.
Composite Leading Indicator in Python or via the MCP
Install the Finance Toolkit with:
pip install financetoolkit -U
Then call get_composite_leading_indicator as shown below.
from financetoolkit import Economics
economics = Economics(start_date='2023-06-01', end_date='2023-12-01')
economics.get_composite_leading_indicator(countries=['United States', 'United Kingdom', 'Japan'])
Or, after setting up the Finance Toolkit MCP, ask:
How did the composite leading indicators of the United States, the United Kingdom and Japan move each month from June to December 2023?
Which returns:
| United States | United Kingdom | Japan | |
|---|---|---|---|
| 2023-06 | 98.6692 | 98.2998 | 99.8519 |
| 2023-07 | 98.7456 | 98.5586 | 99.8473 |
| 2023-08 | 98.8022 | 98.7914 | 99.8444 |
| 2023-09 | 98.8351 | 99.0011 | 99.8342 |
| 2023-10 | 98.8582 | 99.1736 | 99.8154 |
| 2023-11 | 98.9029 | 99.3102 | 99.7915 |
| 2023-12 | 98.9852 | 99.4431 | 99.7713 |
Parameters
get_composite_leading_indicator accepts the following parameters.
| Parameter | Type | Description | Example |
|---|---|---|---|
countries | list[str] | str | None | The countries to include in the data. Defaults to None. | ["United States", "Germany"] |
rolling | int | The rolling window size to use for smoothing the data (simple moving average). Defaults to None. | 4 |
trailing | int | The trailing window size to use for summing the data over trailing periods (e.g. a trailing-4-quarter sum). Defaults to None. | 4 |
growth | bool | Whether to return the growth data or the actual data. Defaults to False. | True |
lag | int | The number of periods to lag the data by. Defaults to 1. | 4 |
standardize | bool | Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False. | True |
rounding | int | None | The number of decimals to round the results to. Defaults to None. | 2 |